What should be included in an employment contract?

One SME was overpaying staff by $10/hour after being misclassified under SCHADS due to poor advice from a big- name HR provider. We fixed it, saved them $100K, and kept every team member on board.

Most business owners don’t avoid HR issues because they don’t care. They avoid them because they don’t know how to start. What do I say to someone whose performance has dropped? How do I handle it when two staff members aren’t getting along? How do I give someone a warning without making it worse? These are the moments where AI, used thoughtfully, can give you structure, language, and the courage to act. without replacing the essential human touch that real leadership requires. And it’s not just leaders who benefit. AI can also support staff preparing for difficult conversations with their manager, whether it’s asking for help, speaking up about stress, or flagging that they’re feeling stretched or unsupported. It’s a tool that can help both sides of the table show up better. But let’s be clear: AI isn’t the answer. You are. It just helps you get unstuck. Why do people avoid difficult conversations? Behind most avoided conversations is fear. Fear of being disliked. Fear of not having the right words. Fear of breaking something that feels fragile. Fear of not being able to repair trust if things go wrong. And when we avoid the conversation, the issue doesn’t go away. It simmers. It spreads. It shows up in team dynamics, trust breakdowns, disengagement, or resentment. That’s where AI can quietly step in, not as a savior, but as scaffolding. A way to rehearse. To say the hard thing softly before saying it out loud. There’s a saying: Easy conversations lead to a hard life. Hard conversations lead to an easier one. Avoiding discomfort might feel safer in the moment, but it often builds into something far more painful later. When we face things early, with honesty and care, we create workplaces where trust grows, tension clears, and people feel safe to speak up. It’s not about being perfect. It’s about being present and willing. Here Are 3 Practical Ways AI Can Help You Face People Issues It Gives You a Starting Point Whether it’s a performance conversation, a team reset, or a difficult “I’m not coping” moment, AI can help you break through blank page syndrome. You still need to bring your leadership lens, but having a first draft is often the hardest part. This is structure, not strategy. It Helps You Frame Feedback Without Emotion AI can help you depersonalise and professionalise your message. That’s especially helpful when you’re feeling frustrated or overwhelmed. You can use it to explain what’s not working and what needs to change with clarity, while adding your human context and care. AI won’t write it perfectly, but it can give you a foundation to build on. It Supports Courageous Conversations With a few smart prompts, AI can help you structure a script using techniques like the GROW model (Goal, Reality, Options, Will). This isn’t just for leaders. Imagine a staff member preparing to ask for support without fear of seeming weak. AI can help them find the words. Courage goes both ways. Why Heart-Based Leadership Still Matters Most AI can’t read the room. It doesn’t see the tired eyes, hear the quiet shift in someone’s tone, or pick up on the tension between what’s said and what’s meant. It can’t show warmth, create psychological safety, or rebuild trust when it’s been shaken. Leadership is a heart-based skill. It’s human-first. It takes courage, emotional intelligence, and the ability to sit in discomfort without rushing to fix it. AI will give you language. You give it meaning. AI Can’t - and Shouldn’t - Replace You AI can help you prepare. But it can’t: Read the room Offer empathy Rebuild trust Notice someone’s shaking hands or tearful eyes Navigate a heated moment with calm, human authority Make value based decisions That’s leadership. And that’s your job. AI can only support and help you be prepared for the conversation. You have to have it. Takeaways: If You’ve Been Avoiding That Conversation, Try This... Use AI to generate a first draft—just to get it out of your head and into motion. Structure your message using a framework like GROW or SBI (Situation, Behaviour, Impact). Review it through a legal and values lens: Is it fair? Respectful? Aligned with policy? Practise it. Say it out loud. Get feedback if needed. Lead the conversation. Don’t outsource your courage. Or your care.  Remember: Leaders set the tone. And silence is a tone too. Final Thoughts AI can’t feel discomfort. But it can help you move through it faster. It can’t sense fear—but it can give you the words to walk through it. Whether you’re preparing to give feedback, ask for help, or reset a team relationship—it’s time to stop avoiding and start leading.

“Just ask ChatGPT.” It’s become the default advice for everything—from writing a recipe to managing staff issues. And while it might work for dinner ideas, when it comes to HR—especially in Australia—it can cost you thousands, damage your reputation, and land you in legal hot water. Why? Because AI isn’t trained on your policies. Or our Fair Work system. Or your obligations under the SCHADS, Retail, Clerks, or Manufacturing Awards. It’s trained on patterns. Not on legal precedent. Not on nuance. But more and more businesses are using free AI tools to: Get advice on pay rates or Award coverage Write termination letters Draft employment contracts Handle conflict and underperformance And they’re making expensive mistakes as a result. I recently had a potential client plugging the information I was providing them into AI—just to “check” if I knew what I was talking about. Then came the awkward (and somewhat heated) conversation when the AI tool gave them a different answer than I did. The heated part wasn’t on my end—it was the client who chose to trust good old Charlie Chat over my 20+ years of real-world HR and compliance experience. Let’s just say, Charlie Chat won’t be showing up beside them at a Fair Work hearing. I know tools like ChatGPT are incredibly convincing but that’s because they’re designed to be. They mimic confidence. They use professional language. But they don’t understand your legal risk, your workplace culture, or the impact of a poorly handled conversation. They don’t know how to read a tense pause in a meeting or recognise that an employee is struggling with burnout masked as underperformance. Real Mistakes, Real Consequences 🔻 Incorrect Pay Rates: A small business owner relied on ChatGPT to calculate casual pay for a retail worker. The AI didn’t factor in the minimum engagement period or weekend penalty rates. The business ended up owing nine months of backpay and faced a Fair Work audit after a complaint. 🔻 Unenforceable Contracts: A client copied and pasted a contract clause from an AI draft, thinking it sounded good. But the non-compete clause had no geographical scope and wasn’t relevant to NSW employment law. The employee left and immediately started a competing business - legally. 🔻 Flawed Termination Advice: An SME used AI to guide a dismissal. It missed key steps like formal warnings, offering a support person, and procedural fairness. The business owner was shocked to receive a general protections claim and had no proper records to support their version of events. Why This Happens Free AI tools like Claude, ChatGPT and others sound confident. That’s their design. But they don’t: ❌ Know current Award rates ❌ Verify Australian employment laws ❌ Understand Fair Work procedures ❌ Read emotional dynamics or workplace context And more importantly, they aren’t accountable if things go wrong. You are. In small businesses, it’s easy to think AI is the smarter, faster, cheaper option. You’re time-poor. You’re trying to get it right. And maybe you didn’t realise HR is actually a specific skill set you need help with - because isn’t it just about chatting to your people every now and then? Unfortunately, it’s not. HR is layered with nuance. It’s legal, yes, but it’s also emotional, relational, and strategic. And AI can’t lead with empathy, adapt to cultural dynamics, assess risk, or understand what truly keeps people engaged, safe, and supported. That doesn’t mean AI has no place in HR. Used with care, it can help you draft a job ad, map out onboarding steps, or summarise a policy. But when it comes to decision-making—especially involving real people, risk, or conflict - human judgment is non-negotiable. HR isn’t just about policies, it’s about people. And when AI gets it wrong, it’s not just a legal risk, it’s a leadership one. Trust gets shaken. Communication suffers. And people start to feel like they’re working for a machine, not a business that values them. 5 Questions to Ask Before You Use Free AI Advice: Would I trust this advice in front of FairWork representative, SafeWork Inspector or another third party? If not, don’t act on it. Have I checked this advice against current Australian legislation or Awards? If not, you’re flying blind. Does this situation require judgment, empathy, or leadership? AI can’t offer any of those. Am I clear on my legal obligations—not just “common sense”? AI doesn’t know your compliance context. If this goes badly, who’s responsible? You are. Not Charlie Chat. AI is a powerful tool, but it’s not your legal team, your HR manager, or your conscience. Final Thoughts AI will give you fast answers. But HR isn’t about speed - it’s about risk, relationships, and results. Use AI for admin and structure. Use a human for anything that carries weight, risk, or impact. You don’t need to fear AI, you just need to know where it belongs. Use it to make your systems smarter, not to replace your leadership. Because at the end of the day, AI doesn’t lead people. You do.

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“How much should I pay a new employee?” “Can I fire someone for being rude to a client?” “What’s the best way to handle staff conflict?” These are the kinds of questions I get from SME owners every week. Now, more and more of them are typing those same questions into ChatGPT and taking the answer at face value. And that’s where it gets dangerous. AI Can Be Helpful—But Not When It Pretends to Be a Human Don’t get me wrong. I love a good tool. And AI has its place. It can draft job ads. It can generate onboarding checklists. It can summarise policies and write newsletter content. But it doesn’t understand your Award, your obligations, or the subtle power dynamics between your ops lead and their new direct report. It doesn’t understand people. And HR is about people. AI can speed things up, but it can also amplify poor judgment if used the wrong way. Real-World Risk: When AI Gets HR Wrong Let’s talk about what happens when AI gives bad advice: 🔻 Misleading pay advice: One business used ChatGPT to determine pay for a part-time retail worker. It sounded reasonable, so they locked it in. Six months later, they discovered the rate was below the minimum under the General Retail Award. Cue $9,000 in backpay, staff distrust, and a very anxiety inducing call from FairWork who to review their pay rates after they received an underpayment claim. 🔻 Dodgy contract clauses: Another business used AI to draft an employment contract. The restraint of trade clause sounded impressive but wasn’t enforceable in NSW (or anywhere else). The employee walked straight into a competitor’s business with sensitive client data and the AI clause they thought would save them was not enforceable. 🔻 Disciplinary advice gone wrong: ChatGPT said it was fine to have a ‘quick chat’ with a staff member about a serious complaint. No notice. No support person. No documentation. The ‘chat’ got heated and the employee was terminated on the spot. The employee later filed a general protections claim, and the employer ended up out of pocket thousands of dollars because they didn’t follow a simple and fair process. So What Can You Actually Use AI For? Great AI use cases in HR: Writing job ads using the most effective SEEK format (if you know what it is) Drafting onboarding checklists and new starter packs Brainstorming internal comms, staff recognition, or policies Writing FAQs or creating HR email templates Structuring agendas for team meetings or performance check-ins Creating short training or toolbox talks from existing polices, procedures or other processes Where you still need a human (you or a HR practitioner!): Award interpretation and pay rates Performance management and disciplinary action Terminations or redundancies Managing conflict or psychological safety Workplace investigations Navigating change, restructure, or return-to-work issues Here’s the Part No One Talks About: HR Is Full of Grey You can’t always ‘Google’ the right answer in HR. Award coverage is rarely straightforward. Misconduct or performance issues aren’t always black and white. And how you handle a situation often depends on tone, timing, relationships, and risk. AI doesn’t know your team dynamics. It doesn’t know your values. It doesn’t care about culture. But you do. And that’s what makes you the leader. Takeaways: 5 Questions to Ask Before You Use AI in HR Is this a high-risk or low-risk task? If it involves people, pay, or discipline – STOP – you need a human touch Do I understand the legal obligations around this? If not, check before you act. ChatGPT won’t pay the FairWork fine and it wont tell you all your legal obligations even if you ask it to. Is there nuance, context, or emotion in this issue? AI can’t read the room. You can. Have I reviewed the AI output for accuracy and tone? Never copy-paste. Always edit with your brain and your brand in mind. Would I be comfortable explaining this process to FairWork representative or SafeWork Inspector? If the answer is no - don’t use it. Final Thoughts AI can help us be faster. But it can’t make us wiser. That’s your job…. and mine. If AI is being used a lot in your business consider if and when you need an AI Policy or some guidelines. The future of HR is people-powered, tech-supported. If you’re using AI in your HR practice, make sure it’s saving you time without costing you trust, culture, or compliance.  Want to see how to do it safely, ethically, and strategically? Reach out to us for a confidential chat.

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We’ve all heard the phrase: one bad apple spoils the bunch. In a business context, that “bad apple” is often a toxic employee—someone whose behaviour doesn’t just affect their own performance but gradually chips away at team morale, culture, and output. But here's the key: it’s rarely just about one person. When toxic behaviours persist, it often signals a failure at multiple levels—from unclear policies to untrained managers, and from inconsistent leadership responses to cultural blind spots. Looking at the performance bell curve, teams generally fall into three groups: Top 20% (High Performers = The Models) – Consistent, proactive, high-value contributors. Middle 60% (Core Contributors = The Not Yets) – Steady workers who are deeply influenced by leadership, workplace culture, and peer behaviour. Bottom 20% (Chronic Underperformers = The Nevers) – Frequently resistant to feedback, disengaged, or disruptive.

Let’s be honest - many small to medium business owners treat employment contracts as a “tick the box” formality. Download a free template, change the name, print it off, and move on, right? Wrong. In Australia’s highly regulated employment landscape, a poorly drafted contract - or worse, no contract at all - can cost you thousands. Contracts are your first line of defence in a dispute, and they’re also a core tool for ensuring clarity between employer and employee about expectations, entitlements, and obligations. Here’s the kicker: if you're paying someone $60,000 to $100,000+ a year, why wouldn’t you invest in a legally sound contract? Spending $500–$1,500 on properly drafted documents is a small price to pay compared to what a Fair Work claim or underpayment dispute could cost you. Now let’s look at real-world cases that show exactly what can go wrong. Real-World Examples of What Can Go Wrong M isclassifying Casuals – WorkPac Pty Ltd v Skene [2018] FCAFC 131 WorkPac engaged a labour hire worker as a casual, thinking the 25% casual loading would protect them from further obligations. But the worker had regular , predictable hours over 12 months, just like a permanent employee. The Court ruled he was, in effect, a permanent staff member - entitling him to annual leave and other NES benefits. The employer was forced to pay up, despite the contract stating he was a casual.  Misuse of Disability Classifications – Challenge Community Services (NSW, 2017)

Learn how the recent Fair Work ruling impacts hiring overseas workers in Australia and what steps employers must take to stay compliant.